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What Hubert Horan has said about Uber's first ever profit

Hubert Horan, an expert in transportation economics, is probably the best Uber analyst around, so we were pleased to find his latest analysis in light of Uber announcing at the end of July that it had, for the first time ever, turned a profit for the second financial quarter of 2023.

Horan has poured over Uber's accounts and found that the company is still not really profitable on its operations. It was able to announce a profit due to a $386 million financial gain in its equity stakes in Didi, Grab and Aurora. Nonetheless, Uber is more or less breaking even now on its core business activity, and that is a significant change. A €932 million improvement in net income and a 11.4% increase in their net margin year-on-year is a big advance in the Californian company's ability to generate returns. The question is, how did they do it?

And this is where it gets interesting. Horan identifies three factors at play. First, CEO Dara Khosrowshahi has ended the company's attempts for Uber to be something more than a taxi and food delivery company with an app. It sold off its autonomous vehicle technology division, which was chewing through cash with little prospect for a return. The dream of driverless, flying Ubers (or something...) will have to wait. It has also left markets where it has no chance of being profitable any time soon, such as Uber Eats' recent exit from Italy. This cost-cutting has saved valuable dollars.

Secondly, Uber has retreated from trying to be an urban taxi service for everyone, narrowing down its focus to areas "with the densest demand". Horan says this is a reversion "to the more economical traditional taxi approach", as parts of the city which are hard to get to and with few customers are inherently loss-making. Also a more narrow service focus mean drivers' (unpaid) waiting time is reduced, meaning the "total (Uber plus driver) revenue potential of each driver shift" is higher.

Finally, and most importantly, Uber has massively increased its 'take rate', the % of the revenue it takes on each journey. Another way of thinking about the take rate is that it's the rate of exploitation: the higher % Uber takes, the lower % the driver gets. As Horan's graph above shows, at the peak of the pandemic in 2020 and 2021, when Uber was suffering a serious driver shortage, the take rate was down at 20% and 19% respectively. In 2022 and the first half of 2023, it has averaged 28%, a major increase in Uber's take rate in two years.

How did Uber manage to ramp up the rate of exploitation? Horan finds that "the delinking of passenger fares and driver compensation was a major driver of this labour to capital wealth transfer". This is the 'dynamic pricing' wage system which GEP has written about before, or what gig economy expert Professor Veena Dubal has dubbed "algorithmic wage discrimination". By using the mountains of personal data Uber has gathered on drivers and customers, it can personalise prices for each to try to find what one former Uber executive called the "revenue-maximising price" .

"Uber simply figured out how to transfer over $1 billion in revenue per quarter from drivers to Uber shareholders," Horan surmises.

Horan finds that 6-7% of Uber's 11% improvement in its net margin comes from a combination of algorithmic wage discrimination and restricting its service to areas of high demand. The rest comes from cutting back on innovation and extracting itself from countries where it's market share is weak.

And this is the kicker when it comes to Uber's prospects, because Horan argues that these drivers' of margin improvement are not sustainable. They are all "one-time improvements" in efficiency or, in the case of the increased take rate, a ramping up of the rate of exploitation that can't keep rising a lot more if you want to motivate drivers to keep coming back. There are also limits to customer price increases before eventually Uber starts reducing it's customer base, as prices are already significantly higher than traditional taxis in many places.

If Horan is right about the drivers of Uber's improved finances and their limits, the financial investors which had poured in $18 billion by 2018 are on to a loser. Horan is of the belief that many of those invested in Uber will soon twig that in Khosrowshahi's rush to profitability, he's given up on "the narratives" which had been sold to Uber's investors that the company is "using innovative technology to disrupt backward industries".

"Uber has abandoned everything that got the market to enthusiastically support them 10 years ago," Horan argues. "Uber is now just a much higher cost version of the traditional operators they vilified as an 'evil taxi cartel'." 

Horan's analysis puts a very different light on Uber's first ever quarter of profit, hailed by Khosrowshahi as a "seminal moment". Time will tell who's right.

Ben Wray, Gig Economy Project co-ordinator

Gig Economy news round-up

  • PLATFORM WORK DIRECTIVE TALKS STALL AS DIVISIONS REMAIN: 'Trilogue' talks between the European Parliament and the Council of the EU to come to a common position on the EU Platform Work Directive have stalled as significant distance remains between the two sides. The second official talks were initially scheduled for 5 September, but were put back to 18 September due to a lack of "sufficient progress from the last technical meeting," Euractiv journalist Theo Bourgery-Gonse said. The official meeting was supposed to be replaced by informal talks on 5 September, but these were also postponed until 18 September, according to Thomas Göransson, international secretary for EU Affairs for Swedish union 'Unionen'. Göransson added that the Council and Parliament remain at loggerheads over the presumption of employment for platform workers, with the Council looking for "legal clarity" that there will not be an automatic re-classification of platform workers from self-employed to employee. Other concerns include the Parliament's wish to promote collective bargaining through the Directive and the role envisaged for the European Labour Authority on issues of data protection and cross-border co-operation. The Council, which represents the member-states in the EU, agreed a position on the Directive in June, four months after the Parliament voted for its position in February, with the final hurdle to the Directive being the Council and Parliament thrashing out a common text and the Parliament ratifying it. Read more here
  • BARCELONA TAXISTAS 'SLOW MARCH' AGAINST UNION FINE: Hundreds of taxis occupied central Barcelona's 'Gran Via' in a 'slow march' on Tuesday [5 September] against the €123,000 fine imposed on taxi union Elité Taxi Barcelona by the Catalan Competition Authority (ACCO). The fine is a potentially crippling financial blow to the majority taxi union in the Catalan capital, which has been a vociferous opponent of the Uberisation of the city since Uber first attempted to enter Barcelona in 2014. The ACCO claims Elité Taxi breached competition laws by organising against Uber's attempt to re-enter Barcelona in 2020. Elité Taxi is taking the case to the Superior Court of Catalonia on the basis that the fine is an infringement of their right to freedom of assembly. Elité Taxi leader Alberto 'Tito' Álvarez told the media at the slow march: "In Catalonia, there is a political/economic court that tries to censure taxis based on disproportionate sanctions for exercising their freedom of expression." Álvarez went on to compare the ACCO to officials in the era of fascist dictatorship in Spain under General Francisco Franco. Read more here.
  • UK RIDER SURVEY FINDS JUST 15% WERE GIVEN A WARNING BEFORE DE-ACTIVATION: Worker Info Exchange (WIX), the UK campaign group for workers' data rights, has surveyed riders on their experiences of de-activation, finding just 15% were given a warning by the food delivery platform before being cut-off from the app. 'Robo-firing' is one of the biggest issues food delivery couriers face, often losing their source of income over night and without any recourse for appeal. The survey found that just 5% had the chance to share their point of view with the platform before they were de-activated, while only 20% understand the reason why their account was blocked. Only 5% felt the de-activation was fair, while the most common words used to express their feelings about how their de-activation affected them were 'stress', 'depression', 'anger', 'pressure', 'anxiety' and 'frustration'. The survey publication was the third part of WIX's 'courier insights series', the other two looked at health & safety and pay. Read more here
  • GLOVO AND UBER EATS TEMPORARILY SUSPEND SERVICE IN MADRID FLOODS: The two largest food delivery platforms in Spain, Glovo and Uber Eats, temporarily stopped customers from making orders on their apps in Madrid last Sunday [3 September] after a red weather alert was issued due to flooding. Glovo Market courier and UGT union member Fernando García tweeted pictures from the two apps displaying messages stating that the service was temporarily suspended due to meteorological conditions. García said: "Little by little [the Works' Council], the unions, the Ministry of Labour, Civil Protection...democracy in short, we are putting a little sanity in the delivery apps". The suspension during the flash floods in the Spanish capital did not apply to all riders, however, with another person tweeting that Amazon was still telling its couriers to work, while another tweeted a picture of a Glovo rider on a moped driving through the flood. Fernando Roan Gomez, president of the AUR riders association, criticised Glovo for re-opening its service later on Sunday evening, posting a picture from the app saying that it's service had recommenced at 8.32pm, after a message stating it was closed just three hours earlier. Uber Eats and Glovo have been criticised for not closing their service during heatwaves this summer. A law was passed in May requiring outdoor workers to suspend work during extreme weather alert warnings, but it does not apply to those who are self-employed, which includes the majority of Glovo and Uber Eats' riders in Spain.
  • GETIR VALUED AT JUST $2.5 BILLION IN NEW FUNDING ROUND: Getir, Europe's largest grocery delivery platform, is valued at less than a quarter of its early 2022 valuation, after the announcement of a new funding round. In early 2022 the Turkish-headquartered platform was valued at $11.8 billion, but that has fallen to just $2.5 billion, after the company's leading shareholders, including the Abu Dhabi wealth fund Mubadala Investment Company, organised a funding round in search of fresh investment, with $500 million expected to be raised. The funding round will close later this month. Getir announced its latest round of global job cuts two weeks ago, with 2,500 jobs set to be slashed, 10% of its workforce. The company has recently exited the French, Spanish, Italian and Portuguese markets, and there have been reports of problems with suppliers in the UK and Germany due to Getir having cash flow problems. The company says it remains committed to the five markets it still operates in, the US, the UK, Germany, Netherlands and Turkey. Global venture capital funding for start-up's fell 50% in the 12 months to March. Read more here.
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Upcoming events

- The second 'trilogue' meeting to negotiate the final text of the EU Platform Work Directive has been scheduled for 18 September.

- The WE-TRANSFORM project is hosting a conference in Turin, Italy on 'a policy agenda for workers transition in automated and digital transport services', 27-28 September. Click here for full details and to register. 

- INDL-6, the sixth annual conference of the International Network on Digital Labor, is hosting a conference in Berlin on 'Digital Labor in wake of pandemic times', 9-11 October. The conference is open to all and free to register. Click here for full details.

- WageIndicator is hosting an online conference on 'A Level Playing Field for Gig Workers', 27 October. Click here for full details and to register.

Know of upcoming events we should be highlighting? Let us know at

Get Involved

The Gig Economy Project is a media network for gig workers and we welcome contributions from workers, writers, academics, activists - anyone who wants to stand up for workers' rights in the gig economy.

If you would like to write for the site, discuss arranging an interview with GEP, or simply have information about developments in the gig economy in Europe you think we should be aware of, get in touch. 

Contact project co-ordinator Ben Wray at or send a direct message to the Twitter: @project_gig.

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